01—Abstract
Summary
Summary of the 10-K filed January 22, 2021. Cited figures are marked; the original filing is the authoritative source.
Intel Corporation reported record revenue of $77.9 billiona for the fiscal year ended December 26, 2020, marking its fifth consecutive year of growth.
The company experienced strong demand in its PC-centric business, driven by work-from-home trends, and saw growth in its data-centric businesses, particularly within cloud service providers and the communications sector. However, a higher mix of 10nm products impacted gross margins, and the company faced macroeconomic weakness in the enterprise and government segments. Intel continued to invest heavily in R&D ($13.6 billionb) and announced a strategic divestiture of its NAND memory business to SK hynix Inc. The company also returned significant capital to stockholders through dividends and share repurchases, totaling $19.8 billion.
02—Key points
Key Highlights
- Record revenue of $77.9 billion, up 8% year-over-year, driven by strong PC demand and data-centric growth.
- Data-centric businesses grew 9%, approaching 50% of total revenue, with particular strength in cloud service providers and communications.
- PC-centric business grew 8%, benefiting from increased PC usage for remote work and learning.
- Gross margin declined by 3 percentage points due to a higher mix of 10nm products and lower margin adjacent businesses.
- Significant investments in R&D ($13.6 billion) and capital expenditures ($14.3 billion) continued, with a focus on future process technology.
- Agreement to divest the NAND memory business to SK hynix Inc. for $9.0 billion.
- Returned $19.8 billion to stockholders through dividends ($5.6 billion) and share repurchases ($14.2 billion).
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Intel Corp kept $0.27.
- Revenue$77.87B100.0%
- Cost of revenue−$34.26B44.0%
- Gross profit$43.61B56.0%
- Operating costs−$19.93B25.6%
- Operating income$23.68B30.4%
- Interest, other & tax−$2.78B3.6%
- Net income$20.90B26.8%
Where FY2020 revenue went
$77.87B- Cost of revenue: $34.26B, 44% of revenue
- Net income: $20.90B, 27% of revenue
- R&D: $13.56B, 17% of revenue
- SG&A: $6.18B, 7.9% of revenue
- Interest, other & tax: $2.78B, 3.6% of revenue
Kept 27% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed January 22, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $77.87B$71.97B | +8.2% |
| Cost of Revenue | $34.26B$29.82B | +14.9% |
| Gross Profit | $43.61B$42.14B | +3.5% |
| R&D Expenses | $13.56B$13.36B | +1.5% |
| SG&A Expenses | $6.18B$6.35B | −2.7% |
| Operating Expenses | $19.93B$20.11B | −0.9% |
| Operating Income | $23.68B$22.04B | +7.5% |
| Interest Expense | $629.00M$489.00M | +28.6% |
| Net Income | $20.90B$21.05B | −0.7% |
| EPS (Basic) | $4.98$4.77 | +4.4% |
| EPS (Diluted) | $4.94$4.71 | +4.9% |
| Shares Outstanding (Basic) | 4.20B4.42B | −4.9% |
| Shares Outstanding (Diluted) | 4.23B4.47B | −5.4% |
05—Questions
Frequently Asked Questions
What was Intel's overall financial performance in 2020?
Intel achieved record revenue of $77.9 billion in 2020, an 8% increase from 2019. Net income was $20.9 billion, a slight decrease from the previous year, reflecting investments and margin pressures. The company generated $35.4 billion in cash from operations and $21.1 billion in free cash flow.
How did the different business segments perform?
The PC-centric business saw 8% revenue growth, boosted by demand for notebooks due to remote work and learning. The data-centric businesses collectively grew 9%, with strong contributions from cloud service providers and communications service providers, though enterprise and government segments experienced a decline. The NAND memory business (NSG) saw revenue growth driven by improved NAND pricing and bit growth.
What were the key strategic moves or announcements made during the year?
A major strategic announcement was the agreement to divest Intel's NAND memory business to SK hynix Inc. for $9.0 billion. Intel also continued to invest heavily in R&D and capital expenditures, focusing on advancing its 10nm and future process technologies. The company also launched new product families, including 11th Gen Intel Core processors and expanded its data-centric offerings for 5G and AI.
How did Intel manage its capital and return value to shareholders?
Intel demonstrated a strong commitment to returning capital to shareholders, returning $19.8 billion in 2020 through $5.6 billion in dividends and $14.2 billion in share repurchases. The company also maintained significant investments in R&D and capital expenditures to support its long-term strategy.
06—Continue